Purchasing a home is one of the most significant decisions you can make in life. It is also one that does not come cheap! Besides your mortgage and down payment, there are many other costs that you should be aware of.
At Inspectify, we want to ensure you never get blinded-sided with unexpected costs. That’s why we have compiled a list of ten costs every new homebuyer needs to know about.
1. Closing fees
This includes a wide range of fees related to closing that you will be responsible for paying. Depending on the state you buy in, these fees could look slightly different. Here is a list of general fees you can expect to pay:1. Survey fees
2. Title agency/lawyer settlement fee
3. Recording costs
4. Home warranty
5. Mortgage application
6. Real estate agent transaction or broker fees
7. Transfer tax
Budget for: 1-5% of purchase price
2. Home Inspection
Before you buy a home, you want to make sure you are aware of any issues. The best part about inspections is that they often help you save money. Homebuyers save $14,000 on average based on the results of a home inspection.
Additionally, home inspections can let you back out of deals if the inspection uncovers safety or structural issues. For that reason, you should never skip a home inspection.
Inspectify makes home inspections fast, simple, and easy. With our nationwide network of inspectors, you can book an inspection in under 60 seconds. We also provide free repair estimates for your entire report (something other guys charge $100+ for)!
Budget for: $300-$500
While the inspection deals with the home’s condition, the appraisal deals with the home’s value. Your lender wants to be sure that the home’s appraised value is not far off the purchase price.
Budget for: $300-$400
4. Mortgage insurance
If you cannot put down 20%, you will be required to pay Private Mortgage Insurance (PMI). This is tacked on to your monthly mortgage payment and will fall off once you own enough equity in the home.
Budget for: 0.5-1.5% of the loan amount per year
5. Moving expenses
You’ll need to think about buying boxes, labor, moving supplies, and vans. Not to mention taking time off work for your closing and to get your things packed and moved in.
Budget for: $50-$150 for moving boxes, $1,000-$1,500 for movers
6. Homeowner Association Fees
You should know whether the home belongs to an association. These fees are generally disclosed during the process, but there may be HOA fees the sellers themselves do not know about. Some associations charge transfer fees or capital contribution fees to new buyers.
Budget for: $200-$300 for monthly dues, $500-$1,500 additional fees
7. Title insurance
Sometimes a contract will be negotiated, so the seller pays for the title insurance, always known as an “Owner's Policy.” This amount varies by state and is based on the value of the home. This one-time fee protects you from any undisclosed liens or title issues for as long as you own the home.
Budget for: anywhere from $200 to over $1,000
When thinking about your monthly budget, you need to consider utilities. Especially if you are moving to a bigger place you’ll need to think about:1. Electricity
6. Cable & Internet
Budget for: about $170 per month
9. Maintenance and repairs
Once you own a house, you’ll need to maintain it. This means making any necessary repairs and renovations. Leaky faucets, faulty HVAC systems, water issues, appliances - oh my! Repairs are inevitable (and another reason to make sure you get it inspected before buying), so having savings for when problems do spring up is in your best interest.
Budget for: whatever you can afford to set aside
If you are “escrowing” your property taxes and insurance, you will be paying into an account from which your lender will pay out the taxes and insurance. Many times they require an upfront payment as a type of cushion for the account. This is an upfront cost that many people overlook.
Budget for: about six months of property taxes and insurance
Buying a home is a HUGE step in your life! If you are there, congrats! Inspectify wants to ensure that you understand everything that goes into buying a home. Be sure to keep in mind these expenses, so unknown costs don’t blindside you.